Reuters launches new China pension index

Reuters has launched a second China pension index, as part of its efforts to create investment performance benchmarks for the country’s enterprise annuity funds.

The Reuters China Pension Index 2 (RCPI-2) was launched on December 18 in response to investor demand and China’s efforts to put the nation's huge pool of savings to work in global capital markets, Reuters said in a statement.

Reuters has built the RCPI series in response to strong demand from both Chinese and foreign investors for benchmark indices in the developing pension industry in China. The Enterprise Annuity market, currently estimated to be worth more than $10 billion, is expected to grow exponentially to $100 billion in the next five years, Reuters added.

Reuters China Pension Index 2 will form a benchmark for the investment performance of enterprise annuity funds that do not have equity investments. The newly created index takes a more conservative approach and complements the existing index. Together they will give plan sponsors, trustees and investment managers two benchmarks to refer to, according to their investment styles. Both indexes will be updated daily.

Reuters China Pension Index 1 (RCPI-1) was launched on March 31, and was the first benchmark index in China to measure the investment performance of its enterprise annuity funds. RCPI is an investment benchmark for China’s enterprise annuity system, one of the three pillars of the Chinese pension system.

The launch of the pension index follows the move by China’s National Social Security Fund in awarding its first mandates to foreign fund managers, entrusting 11 firms with investments of more than $1 billion in international stocks and bonds on its behalf.